Creditor tells me I should DECREASE my monthly payments...

J_Tizzle

Looking for some advice here please.

I've been on a DMP with CCCS since April 2011 and all of my creditors immediately froze interest except one. Lloyds TSB.

They did at least reduce it to about 3% but they have recently reviewed the arrangement and, because my monthly payments exceed the minimum monthly payment, they have increased the interest to almost 25%.

The LTSB telephone operator actually advised me to reduce the amount I was paying each month. Apart from the fact that the CCCS refused to do this, it seems crazy that I am being punished for paying too much.

This now means that my monthly payment of about £130 is almost useless since they are charging interest of more than £100 each month. At this rate it would take 17 years to pay off the balance, instead of the four years CCCS estimate it was taking me to be totally debt-free.

Of course LTSB are entitled to do all of this, but it goes against the point of the DMP agreement which is to help someone (me) who has got in over their head debt-wise to pay back their debt as quickly and efficiently as possible. I feel as if I am being penalised for having sacrificed other things in my life in order to reduce my debt as quickly as I can.

I have just sent LTSB a lengthy letter, but does anyone have any advice they can offer?

Many thanks.

minx1985

Ouch. Sorry to hear that LTSB are giving you such a raw deal. Can the CCCS not redistribute the extra money you were paying LTSB to one of your other creditors?

J_Tizzle

Thanks for the reply.

I suggested that to CCCS but they said no. They were worried that if another creditor started to receive more money from me then they too might think I'm paying 'too much' and I would have the same problem with them.

heather66

a lot of the banks/ creditors will not stop interst if you are paying back what they deem a large payment
...i was paying barclaycard £45 ona DMP and they added interest B/C says i would have to pay £15 or less to enable them to stop the interest

kitkat34

hi well done on your dmp sorry about lloyds we have had loads of probs with them also.

heres my little thought for you to think about what about doing a self managed dmp keep everyone else the same but reduce lloyds payment so interest stopped and save what you would have paid them to hopefully make a f&f offer in the future.

hth
kat

minx1985

Sounds like a good option kitkat- how ridiculous that people are penalised for wanting to clear their "slate". Good luck J_Tizzle!

Time_to_face_the_music

J_Tizzle wrote: »

Looking for some advice here please.

I've been on a DMP with CCCS since April 2011 and all of my creditors immediately froze interest except one. Lloyds TSB.

They did at least reduce it to about 3% but they have recently reviewed the arrangement and, because my monthly payments exceed the minimum monthly payment, they have increased the interest to almost 25%.

The LTSB telephone operator actually advised me to reduce the amount I was paying each month. Apart from the fact that the CCCS refused to do this, it seems crazy that I am being punished for paying too much.

This now means that my monthly payment of about £130 is almost useless since they are charging interest of more than £100 each month. At this rate it would take 17 years to pay off the balance, instead of the four years CCCS estimate it was taking me to be totally debt-free.

Of course LTSB are entitled to do all of this, but it goes against the point of the DMP agreement which is to help someone (me) who has got in over their head debt-wise to pay back their debt as quickly and efficiently as possible. I feel as if I am being penalised for having sacrificed other things in my life in order to reduce my debt as quickly as I can.

I have just sent LTSB a lengthy letter, but does anyone have any advice they can offer?

Many thanks.

We have an identical situation with M&S who also told us in a letter to reduce our DMP payment and they would stop interest. CCCS said this was not possible and so M&S continue to charge interest negating their DMP payment each month and extending the debt.

We took the case to the FOS but unfortunately they are unable to help as they have examined M&S terms and conditions and they are within their rights to do this.

As we also have Lloyds TSB and NatWest charging us interest, £230 of our monthly DMP payment is taken up by interest charges and we will never finish our DMP in the predicted timelines unless we do something ourselves.

So we save every penny we can and make extra payments to the interest charging accounts in an attempt to cancel out this interest and keep our DFD on track. Every penny earned on ebay or Amazon or a bit of overtime etc goes towards extra debt payments.

We know this is outside CCCS recommendations but we refuse to have our debt extended in this way so it's the only action we can take. We did speak to the FOS about these extra payments and they considered it was an acceptable action given the circumstances.

Good luck Tizzle and please let us know how you get on

J_Tizzle

Many thanks for the advice, guys.

I did think about going the self-managed route with the DMP, although I must admit I find the prospect quite daunting, especially as it has been so easy with CCCS. I am sure it is just a matter of sending out the appropriate template-letters and hoping that the terms are accepted though.

I will wait for a response from LTSB before looking at doing that, I think.

kitkat34

we are doing a self managed dmp and at first i was terrified at the thought but actually i found it very empowering and easier than i expected i use cashflow and 12 creditors stopped interest and charges straight away, natwest have just stopped interest and only problem im having is with jd williams who are pains but im alot more confident now and feel great dealing with the different companies.
and any problems ive always got the wonderful ppl on here to offer help and advice

good luck with lloyds and good luck with what ever you decide to do in the future re your dmp and always remember ppl on here are always there to offer help advice or even just a place to come for a kind shoulder to cry on

kat

Mrs_Arcanum

One ridiculous instance where having a CCJ pays.

Anondebtadvisor

Creditors have different criteria for when they will freeze interest and charges - if you are paying "too Much" they will only reduce the interest.

If you are paying a minimal amount they will freeze it completley -